That you have insight into the paranoia to me indicates that it's anxiety-based and not psychosis-based. Psychosis is actually a symptom that can manifest in a wide variety ways, and it can come from anxiety, trauma, sleep-deprivation, mental illnesses like bipolar or schizophrenia, drugs, etc. Even flashbacks with PTSD are a form of psychosis.

After all I have read and experienced, I think that when psychosis is coming from a mental illness, in the vast majority of cases, the person will not have insight, and their moments of clarity will be very limited (if they exist at all).

But when psychosis (delusions and hallucinations) are coming from anxiety, trauma, etc that often a person will have insight and be able to talk themselves through it, even though it's still life-disrupting and stressful.

For me anxiety can easily trigger mild psychosis, especially if the anxiety is causing sleep problems. I recently had a crap-ton of anxiety at work, and at one point a coworker addressed me, and when I looked up, his eyes were completely black and his face was distorted. It was a very brief moment, and afterwards I was immediately able to write it off in mind as not real.

So rather than it being a psychosis-based issue, it's more so an anxiety-based issue that can lead to psychosis as a secondary symptom. My best guess is that you would probably benefit more from psychotherapy than psychiatric medication, maybe save for something for anxiety to help you initially.