The configuration is correct, em1 should have no gateway.
Now, confirm that both links are working:
# ip ro sh ta balance
nexthop via 172.16.16.x dev eth2 weight 5
nexthop via 192.168.1.1 dev eth1 weight 1
The above lines show that the default gateway is “double” and traffic is balanced.
tail -f /var/log/messages
and switch off one of the internet routers/modems.
You should see something like:
Event: wan-uplink-update down <provider> <checkip> eth2
ip ro sh ta balance
should show only one line through the working wan connection. If you later switch on the router, lsm will bring the link up again in about 100 seconds (to avoid frequent up/down in case of intermittent problems).
Final note: there’s no need to define the two network with the local wan ip, but it will not prevent functioning: