A look on lds.org gives us this definition for parables;
See also Gospels—Harmony of the Gospels
A simple story used to illustrate and teach a spiritual truth or principle. A parable is based on comparing an ordinary object or event to a truth, and the underlying meaning or message of a parable is often hidden to listeners who are not spiritually prepared to receive it (Matt. 13:10–17).
Why did the Savior teach using parables?
In Matthew 13:13-15, Mark 4:12, and Luke 8:10 we learn the reasons for using parables to teach was this; to veil the meaning. From the Bible dictionary it says this; The parable coveys to the hearer religious truth exactly in proportion to his faith and intelligence; to the dull and uninspired it is a mere story, 'seeing they see not' while to the instructed and spiritual it reveals the mysteries or secrets of the kingdom of heaven. Thus it is that the parable exhibits the condition of all true knowledge. Only he who seeks finds.'
I have found in my personal experience that a deeper consideration for the parallels between physical and spiritual things given in parables allows me to understand more about a principle than just reading the words alone. Pondering and asking and seeking for answers gives us time to pause and reflect and for the true teacher, the Holy Ghost to instruct and bear witness of the things that we are learning by way of the spirit.
How do we apply the parables in our own life? Here are some areas to consider and some parables to read as well.