The COALESCE function is a powerful tool in SQL for handling NULL values. It allows you to specify a list of expressions and returns the first non-NULL value from that list. If all expressions are NULL, it returns the last expression in the list. This is particularly helpful when dealing with data that might be missing or incomplete. For instance, in a customer database, a customer's phone number might be missing. Using COALESCE, you can provide a default value for the phone number if it's NULL, preventing errors or unexpected results in your queries. COALESCE is also useful for simplifying queries that need to handle different possible outcomes. Instead of writing multiple `CASE` statements or `IF` conditions, you can use COALESCE to concisely return the appropriate value.